Wednesday, August 20, 2008

The Shady History of Cindy Hensley McCain's Family

I have been working on a new post of a somewhat philosophical nature. I've gotten bogged down in it and it is taking me some time to figure out exactly what I want to say. So in the meantime, I've decided to go with raw partisanship.

In wandering around the internet, I came across some stories about the very shady history of the family of John McCain's wife, Cindy Hensley McCain. In fact, as soon as I saw the stories, the name "Hensley" rang a bell with me, being pretty familiar with the annals of major white collar crime in America. I had just never made the connection to McCain's wife.

The stories raised some very pointed questions about the sources of the Hensley family wealth, a family fortune that has made John McCain a successful politician and one of the wealthiest members of Congress. Specifically, these questions relate to the criminal history of various members of the Hensley family, including Cindy McCain's father, Jim Hensley, and the alleged connections the family has had to organized crime. These questions are certainly worthy of scrutiny, and hopefully, they will find their way out of the blogosphere and into the mainstream media.

At the outset, I would like to point out one of the shortcomings of some of these stories as they appear on the internet. The stories often appear in highly unreliable right-wing, anti-Semitic and racist websites. Indeed, much of the information on the Web relating to the criminal connections of the Hensley family comes from right-wing sources (including Jerome Corsi) who have long-standing vendettas against McCain. Unfortunately, these tainted sources may have caused many people in the media to shy away from the story, assuming that it is merely the lunatic ravings of McCain's right-wing enemies. But the information is real, and it can be verified through numerous sources independent of the right-wing lunatic fringe.

A second problem with this story is, why is it relevant? Much of the information about the Hensley family's criminal past goes back many years, and one can legitimately ask what bearing this should have on McCain's current candidacy. I believe the story is relevant for several reasons.

First, the Hensley family wealth, and the political connections that went along with it, have been the key to McCain's success. The Hensley family history is well-known in Arizona. Even better known is the history of Kemper Marley, the principal benefactor of the Hensleys and a man who was, in possibly every sense of the word, the Godfather of the Arizona Republican Party. When John McCain married Cindy Hensley, starting his political career almost immediately after they got married, it is inconceivable that McCain could have been ignorant of the connections he was making.

In fact, when the controversy recently arose about McCain's inability to recall how many homes he and his wife own, he told Katie Couric on 60 Minutes that he had been "blessed" to have benefited from the wealth of the Hensley family. McCain also described his father-in-law Jim Hensley as a "role model" who had succeeded in business by fulfilling the American Dream. http://www.politico.com/news/stories/0808/12754.html McCain did not mention that Hensley was a convicted felon with ties to organized crime figures.

The unsavory Hensley history also links directly with some of the most distasteful aspects of McCain's own career. The Hensleys introduced McCain to Charles Keating, a long-standing friend of the Hensleys and a co-venturer in a shopping mall in which the Hensleys invested a great deal of money (approximately $400,000). Keating contributed heavily to McCain's campaigns and provided private jets for McCain's usage. McCain returned the favor.

Finally, the most egregious aspect of the story is the way this has all been covered up by the mainstream media. For that reason alone, the story of the Hensley family's criminal background is highly relevant to the current campaign.

A good place to start looking at this story is with the puff-piece cover story that Newsweek ran about Cindy McCain in its June 30, 2008 edition entitled "In Search of Cindy McCain." http://www.newsweek.com/id/142650 The full extent of what Newsweek reported about the history of the Hensley family wealth is as follows:

"Her [Cindy's] father, Jim Hensley, was one of the most prominent men in the state. A World War II bombardier, he was shot down over the English Channel. After the war, he and his wife, Marguerite, borrowed $10,000 to start a liquor business. Through the years, it grew to become one of the largest Anheuser-Busch distributorships in the country."

A reader of this story would view the Hensley success story as a sort of Mom and Pop operation that made good through old-fashioned hard work. The truth appears to be a good deal more complicated, and sordid. An article entitled "Haunted By Spirits", which appeared in the PhoenixNew Times in February 2000, provides an excellent overview of the story. http://www.phoenixnewtimes.com/2000-02-17/news/haunted-by-spirits/1

In fact, the funding for the Hensley liquor distributorship did not come from a mere "loan"; it reputedly came from Kemper Marley. Marley is the key figure in the history of the Hensleys, and therefore McCain, and a towering figure in Arizona politics. Marley was also a known criminal who is widely believed to have had extensive connections to organized crime. Jim Hensley had worked for Marley going back to the 1920s, when Marley was the most powerful bootlegger in Arizona. After World War II, Hensley again went to work for Marley, who had by then started a major liquor distributorship, United Distributors, following the repeal of Prohibition.

In 1948, Jim Hensley and his brother, Eugene Hensley, were convicted in Arizona Federal Court of conspiracy to falsify the records of United Distributors. According to the testimony at trial, the Hensley brothers had created phony invoices to cover up unreported cash sales of liquor out of the business. Eugene Hensley was sentenced to one year in prison and Jim Hensley received a sentence of six months, which was later suspended. Marley was not charged, and neither Hensley testified.

Jim Hensley was again indicted for Federal liquor violations in 1953. This time Hensley, as well as Marley's company, were acquitted. A young Arizona lawyer named William Rehnquist was part of the defense team.

Jim Hensley started his Anheuser-Busch distributorship in Phoenix in 1955. Allegedly, Marley bestowed this business upon Hensley as a favor for having kept his mouth shut during the earlier criminal trials. According to AmericanMafia.com, Marley was closely connected with Peter Licavoli, Jr., a Detroit mobster who relocated his operation to Arizona in the 1940s and became known as the "Mafia Prince" of Arizona. http://www.americanmafia.com/Feature_Articles_219.htmlAmericanMafia.com, a non-political website containing the writings of well-known crime writers and former law enforcement people, describes the linkages among Hensley, Marley, and the Mafia:

"Take the recent example of Senator John McCain, Presidential candidate and Senator from Arizona. Very few people outside the world of organized crime realize that the father of the Senator's second wife is James W. Hensley. And who was James W. Hensley, you ask. He was an Arizona businessman who fell in with the wrong crowd a while back, and ended up taking the rap for a wheeler-dealer named Kemper Marley, Sr. over a liquor violation case back in 1948. Although Hensley was represented by the best defense Arizona cash could buy, the services of future Chief Justice of the United States Supreme Court, Justice William Rehnquist, he got slammed away for a whole year. But it all worked out. When Hensley strolled out of the joint, Marley bought his silence with a lucrative Phoenix-based Budweiser beer distributorship. So, who is this Kemper Marley Sr? To answer that you have to go back to a sweltering summer day in 1976 when Don Bolles, a reporter for the Arizona Republican Newspaper, stepped into his Datsun, put his foot on the peddle and was blown to bits. Parts of the reporter's body were found ten feet from the burning car. Bolles had been poking into Arizona's local and state governments and discovered a land fraud ring, influence peddling, and shady deals that appeared to lead to the very top of Arizona's power structure and to Senator Barry Goldwater's doorstep. If the purpose of murdering Bolles was to cover a series of crimes, it was a big mistake. An enraged news media descended on Arizona, determined to uncover the facts behind the Bolles killing. The investigation led to a Phoenix liquor magnate and one time Bookie named Kemper Marley Sr., who had ties to Arizona's resident Mafia Prince, Peter Licavoli. Marley was a major financial and political power in the state and wanted to take back his seat on the Arizona Racing Commission. He had already been appointed to the post in 1976 by the Governor, only to resign several days later when his ties to organized crime surfaced. The reporter who made the connections between the mob and Marley was Don Bolles."

Interestingly, when the Obama campaign began running ads criticizing McCain for his inability to recall how many homes he owned, McCain responded by running an ad attacking Obama for having purchased his family's one home in part by arranging for a loan from Antonin Rezko, whom the McCain campaign emphasized is a "convicted felon." McCain is the beneficiary of far greater financial largess derived from Jim Hensley, also a "convicted felon."

Notably, Hensley's criminal record did not prevent him from owning a liquor distributorship, at least not in the eyes of Arizona authorities. Hensley filed a false disclosure form in 1988 concealing his Federal conviction, but Arizona authorities took no action against Hensley.

The Budweiser distributorship was not the only business venture that the Hensleys entered into with Marley. In December 1952, Jim and Eugene Hensley purchased a controlling interest in Ruidoso Downs, a racetrack in Albuquerque. However, subsequent litigation revealed that a concealed owner of Ruidoso was Teak Baldwin, a well-known Arizona bookmaker and associate of Marley. According to the New Mexico State Police, the Hensleys and Baldwin were acting as fronts for Marley in the venture. Baldwin would later be convicted of tax evasion. In 1955, Jim Hensley sold his stake in Ruidoso to his brother Eugene.

In 1966, Eugene Hensley was convicted of Federal tax evasion for having skimmed large amounts of money out of Ruidoso to make improvements on his home in Scottsdale and to transfer funds to his family. (The cases of Hensley v. United States, 406 F.2d 481 (10th Cir. 1968) and Ruidoso Racing Association v. Commissioner of Internal Revenue, 476 F.2d 502 (10th Cir. 1973) are very well-known in the law of tax fraud). The United States Tax Court described the evidence of Hensley's fraud as "overwhelming." Eugene Hensley was sentenced to five years' imprisonment. Before reporting to prison, Hensley transfered ownership of Ruidoso to Newco Enterprises, which immediately entered into a long-term contract with Emprise Corporation. Emprise had a long history of problems with governmental authorities as a result of organized crime connections. Emprise reorganized and moved its operations to Arizona, with strong backing from Kemper Marley. Marley had contributed heavily to then Arizona Governor Raul Castro, and Castro appointed Marley to Arizona's racing commission in 1976.

Marley's dubious activities drew the attention of Don Bolles, an investigative reporter for the Arizona Republic. As a result of Bolles' revelations, Governor Castro removed Marley from the racing commission. In June 1976, Bolles was killed by a car bomb. The organization Investigative Reporters and Editors ("IRE") started the "Arizona Project" to probe the background of Bolles' murder. http://www.ire.org/history/arizona.html A tow-truck driver and dog track operator, John Charles Adamson, pleaded guilty to having planted the bomb that killed Bolles and testified against two others who had hired Adamson to commit the murder. Bolles' last words were, "Adamson, Emprise, Mafia." Adamson later testified that he was told by the man who paid him to plant the bomb that killed Bolles that Marley had wanted Bolles killed, as well as then Arizona Attorney General Bruce Babbitt, who was conducting an antitrust investigation of the Arizona liquor industry. Marley was never charged for the murder of Bolles.

It is in this context that John McCain comes on the scene. McCain met Cindy Hensley in early 1979, he divorced and remarried in 1980, and after retiring from the Navy, McCain settled in Arizona and promptly went to work for the Hensley distributorship in a "public relations" capacity. The job gave McCain a handsome salary and a high profile in the state.

It is important to remember a few facts about McCain's personal background. McCain was a Navy brat, born in the Panama Canal Zone, who spent his entire life moving around military bases and never setting down roots. He had no personal connections to Arizona, or indeed, to anyplace else. If he was intent upon establishing a political career, it was essential that he establish strong connections with the local political establishment. It strains credulity to believe that McCain was unaware of the Hensley family history and the family's close connections to Marley, one of the most powerful men in the state.

In 1982, less than two years after marrying Cindy and going to work for Hensley Distributors, McCain ran for a seat in Congress. The seat in Arizona's First Congressional District was open because of the recent retirement of Republican Congressman John Rhodes. The Hensley family bought a house in the District in order to enable McCain to run. McCain won the election, angrily challenging "carpetbagger" allegations that were made against him by pointing to his status as a Prisoner of War in Vietnam.

In 1986, McCain took over the Senate seat long held by Barry Goldwater, another recipient of Marley's support. As noted, another Hensley family friend and business partner, Charles Keating, helped finance McCain's rise. The members of the Hensley family, including Cindy and her father, were also business partners with Keating in an Arizona shopping mall. The Hensley investment in that Keating venture was made through the same real estate partnership that purchased the home in Arizona's First Congressional District that launched McCain's political career.

McCain would later reach out to Federal regulators on Keating's behalf when Keating's massive savings and loan fraud began to unravel. McCain was officially chastised by the Senate for showing bad judgment in his dealings with Keating, although he escaped the more severe discipline meted out to other Senators. McCain adamantly refused to answer questions, however, about the Hensley family's business relationships with Keating, calling reporters from the Arizona Republic "idiots" and "liars" for having inquired about the Hensley transactions. Once again, McCain relied upon his background as a POW in Vietnam to deflect any questions challenging his integrity.

I think this is a story worth knowing about. It would be nice if somebody reported it.